Preparing For The Afterlife

Planning and investing in land for burial is wise as it is getting more expensive

According to the United Nation’s projection, Malaysia will become an ageing nation by 2030. The National Policy for the Elderly mentioned that a country achieved the status of an aging nation when 15% of its population consisted of those aged 60 years and above.

Many in the year 2040 would be aged 36 and above, according to the National Statistics Department’s (NSD) Population Projections 2010-2040 document.

The NSD said Malaysians would also be making fewer babies while the annual growth rate would decline from 1.8% in 2010 to 0.6% in 2040. On the other hand, the population aged 65 years and above is projected to increase more than three-fold compared to the 2010 population.

The UN Development Programme (UNDP) stated that 90% of the contributors to the Employees Provident Fund (EPF) in Malaysia did not even have enough money to live a simple lifestyle for a period of five years after retirement.

The fourth Malaysian Population and Family Study by the National Population and Family Development Board, which was matched with the results of the Population, and Housing census of 2010, found that about 23%, or 538,000 of the 2.4 million senior citizens in Malaysia suffered from the ‘empty nest’ syndrome.

The even more pressing question is what will happen to this group of people once they pass on to the next world. Property Insight met up with Nirvana Asia Group chief marketing officer Olivia Lim to understand how one should start early to save and buy a burial plot to avoid complications later.

“With a land bank of about 1,670 acres, Nirvana Asia Group is one of the largest privately owned memorial park in South East Asia and has been in Malaysia for 25 years. Nirvana has been perceived as a memorial park catering only to the high end premium market,” said Lim who also stated that it was partly factored by the positioning of Nirvana’s products.

However, in reality, Lim said that, “Nirvana Asia Group also offers many affordable burial lots as we have plenty of land allocated for the average middle income group-those earning RM60,000 per annum – to low income segments.”

Burial plots getting expensive

Presently Lim shared that most Malaysians will only buy burial lots when they turn 55 even though death can strike anytime. Young people, like those aged below 30, will usually work hard to buy a car, a medical card or even a home first. She has seen many families left without burial lots or even funeral services as diseases such as heart attacks can strike at a young age.

“Nirvana encourages young Malaysians to start investing in pre-need burial plots as a form of investment for the future, we do not encourage speculation because of the nature of our business,” said Lim. She said based on the studies done, the most popular trend will be family lots, as many will be taking out their EPF to buy that. This shows that consumers know that burial lots will become less affordable in the future. In fact, the prices of burial lots have doubled compare to 10 years ago.

Different locations for the burial plot will be priced differently, with an average family lot (corner lot) of RM228,000 to a corner lot of RM1.4mil.

According to Lim, the most expensive family burial lot was sold for RM8million, and was transacted in the year 2012. She said that people will buy for such a price because they can keep it for a few generations.

“We have several packages, what we call affordable housing, which will include not just the bare land but also the tomb,” shared Lim, who mentioned that the lots are for two people, priced at RM30,800.

The lower range package which will be without the tomb is priced at RM23,300, while the price of columbarium for two people is RM8,200,” explained Lim.

Financing facility

According to Lim, Malaysians wanting to buy a burial plot can actually pay by monthly instalment without any interest. They can share the cost with their family members or relatives and buy together, and they can immediately use the land, as soon as they complete the payment.

She gave an example where an individual buying the combo package for two, will be paying RM30,800. This includes the tombs and everything else. They have to first place a 20% deposit or RM6,000, and then pay the rest via instalment within 24 to 48 months at CIMB bank nationwide.

“We call ourselves a developer as well, but for a different market. The difference is that we do have to provide perpetual maintenance unlike most developers,” said Lim who also shared that the supply of land however, would not come easily as one of the criteria is to have good ‘Feng Shui’.

She said that Nirvana, unlike other developers, cannot just acquire any land for burial because burial plots must have specific land forms, water, soils and rivers, which is also one of the main reasons why people come to Nirvana when they want to purchase burial plots. Nirvana is doing so well that it’s turn over per annum is about RM700million per annum.

Non speculative trade

At present, Lim said that the price growth rate for burial plots increases by 10% each year, which is very fast, in view of supply shortage for certain range of products. Therefore, Lim advises the younger generation around the age of 30 to buy the burial plots now and lock in the price for future use. They should set aside and save a sum of between RM400 to RM600 to acquire these plots.

“We don’t encourage speculation, but just like people buying ‘insurance’, when they realise they are financially tight, they can always dispose off by approaching any one of our 2,000 Nirvana agents,” shared Lim.

According to Lim, the owner will receive a certificate for every plot of land or what is termed as ‘land title’, therefore, there will be an administrative fee of a minimum of RM300 or 2% – whichever is higher – for any name transfer.

“Nirvana does not do transaction for customers, only name transfer, because we believe some who have kept their plots for over a decade might upgrade to a nicer design,” suggested Lim.

There are two zones in Nirvana Memorial park, the first one is the old zone which has an oriental concept, while the next zone has a ‘Zen’ concept.

Future plans

In the last decade, families may have 10 children, so if their parent pass away, the 10 children can fork out the money to pay for the burial, but the demographics have changed so much since then. Lim said that young Malaysians should be independent, and not dependent for their children to take care of their future needs like the old days, because of their lifestyles.

“Therefore, Nirvana will be rolling out a new plan for young Malaysians to own burial plots, we call it pre-plan life management and will launch it on January 2016 which is when they can start to pay for the instalments,” said Lim.

This is vital as she believes that nobody can get any more suitable land for burial in the next 20 years, due to land clearance. Nirvana itself has even announced via radio that they have purchased a parcel of land for a building over Dewan Bahasa dan Pustaka (DBP) with a few thousand compartments for urns.

Lim shared that Nirvana has a sinking fund that will be managed by the bank, which in-turn generates dividend funds for perpetual maintenance cost. The money will then be used to maintain the park through gardening, fertilising, manpower and cleaning work to ensure the parks are in tip-top condition.